India won’t give up right to reform PDS: Sitharaman

She said that if required India would also raise the issue at the upcoming G-20 Summit in Brisbane.

Union Minister of State, Commerce (Independent Charge) Minister of State, Finance Nirmala Sitharaman at the Indian Express Idea exchange in New Delhi on August 21st 2014. (Source: Express photo by Ravi Kanojia)

The government on Thursday said it is committed to engaging with the World Trade Organization (WTO) but will not give up its sovereign right on reforming the public distribution system (PDS) or deciding on food subsidies.

This was articulated by Minister of State for Commerce (independent charge) and Finance Nirmala Sitharama at The Indian Express’s Idea Exchange programme.

“PDS, efficient use of subsidy or how many people will benefit from PDS are all issues we, in India have to decide for ourselves. That is no way going to be driven by WTO,” she said but stressed that India will honour the commitment to the WTO on trade facilitation, public stock holding and least developed countries. “I will honour that sovereign commitment but let me do the course correction first,” she said.

The minister’s comments came at a time when India has refused to sign the trade facilitation agreement that was agreed upon in the Bali ministerial, without any definite move to finding a permanent solution to the issue of public stock holding of foodgrain for food security.

Asserting that India is not isolated in its stance, Sitharaman said, “My extreme argument is that even if we are isolated, I would stand to defend my farmers, my country and my poor people. It is my sovereign right… we are reforming our PDS — it is my sovereign business, I’ll do it the way I want.”

She said that if required India would also raise the issue at the upcoming G-20 Summit in Brisbane and would use all such international platforms to discuss the issue.

However, she said that India is keen to engage with the WTO and to convince as many member nations as possible about the importance of public stock holding for India and other countries, stressing that it does not go against the Bali declaration.

Pointing out that the current base year for calculating food subsidies is 1986-87 under the WTO, Sitharaman said India has instead suggested that the base should be fixed on the basis of the average prices of last three years. “So it will be a floating base and nobody would be able to question it,” she said.

Meanwhile, outlining the agenda for Prime Minister Narendra Modi’s visits to Washington and Tokyo over the next few weeks, she said the government would use trade and commerce to push through diplomatic efforts.

India would continue discussions with the US on outstanding issues, she stressed, adding that these would include the movement of skilled labour, IPR related issues, difficulties faced by the Indian pharmaceutical industries, problems of IT and ITeS industries as well as totalisation issues. “There is a big amount of money foregone by Indian skilled workers and this will be raised at the PM’s visit,” she said.

Prime Minister Narendra Modi is scheduled to visit the United States next month while he will embark on a four-day trip to Japan from August 31 where he will hold discussions with his Japanese counterpart Shinzo Abe. “Market access is an issue which we have raised with Japan along with the issue of non-tariff barriers. Will talk about them at the visit,” she said, adding that Japan has also shown a lot of interest in India’s planned industrial corridors.